New oil, gas rules stir up controversy

Hickenlooper’s attempts at dealing with air pollution lauded by enviros
The Colorado Statesman

Gov. John Hickenlooper on Monday stood with energy leaders and one environmental group to push for oil and gas air pollution rules that would include reducing methane emissions.

But the governor — who has experienced an increasingly tense relationship with environmentalists, a core base of his Democratic Party — still has a lot of work ahead of him if he’s to win the trust of the environmental world.

Much of the controversy rests with Hickenlooper’s support of hydraulic fracturing. The governor, a former geologist, has unequivocally stated his support for so-called “fracking,” despite five local communities having banned or imposed moratoriums on the drilling process.

First, Longmont voters banned fracking last year. Then this year, Broomfield, Fort Collins and Boulder joined with five-year moratoriums. Lafayette passed a ban on new oil and gas activities. The bans passed despite big spending by the Colorado Oil and Gas Association.

Proponents of the bans, a largely grassroots uprising, spent about $27,500 in the four municipal elections, as of the last filings before the election. COGA, however, spent about $883,000 to fight the proposed bans.

Hickenlooper did not weigh in on the municipal elections. But the state has supported a lawsuit filed by COGA seeking to overturn the existing ban in Longmont. That case is pending.

He said on Monday that his administration does not have plans to sue any of the other local municipalities for passing fracking bans or moratoriums.

The governor has also expressed his opposition to a patchwork of local rules and regulations and has supported the state suing Longmont over ordinances enacted separate of the state. That trial is set for next summer.

Hickenlooper’s support of fracking has hit the mainstream. At one point earlier this year, Hickenlooper said he took a swig of frack fluid to prove that the ingredients used in the process are not dangerous to the public. He explained his experience at a U.S. Senate hearing.

He has felt the wrath of environmentalists as a result, who have targeted him as being too cozy with the industry. They call him “Gov. Frackenlooper.”

In an Internet ad released Tuesday by Americans Against Fracking, Frack Free Colorado and Food and Water Watch, several celebrities ask Hickenlooper, “What the frack?” They go on to encourage him to “ban fracking now.”

Hickenlooper was one of only four Democrats to be singled out. He joined California Gov. Jerry Brown, New York Gov. Andrew Cuomo and President Barack Obama in being publicly chastised.

“Hopefully the country will listen to its citizens who are realizing that we can’t frack our way to energy and economic security,” said actress Daryl Hannah, a Colorado resident.

U.S. Rep. Jared Polis, a Democrat from Boulder, also appeared critical of the state’s oil and gas policies. He said this week of the governor’s Oil and Gas Conservation Commission from the House floor, “The fracking rules are overseen by an oil and gas commission that is heavily influenced by the oil and gas industry.”

Hickenlooper says he is listening. At a news conference on Monday, he said the issue is about striking a balance between the energy needs of the state and the concerns expressed by citizens and communities.

“What we’ve done is work with the environmental community and oil and gas community to try and find compromises and use common sense to say, ‘How can we make sure we get to the cleanest possible outcomes in terms of air quality?’ Yet at the same time recognize that we have businesses here that employ our citizens and are helping solve the energy challenges that we face as a country,” Hickenlooper said, as he proposed new pollution rules for the Air Quality Control Commission to adopt.

The commission met on Thursday when it set a public hearing for February 2014. The tentative date is for a three-day hearing from Feb. 19-21.

The commission heard about two hours of public comments from a wide spectrum of stakeholders, including industry leaders and environmentalists, as well as concerned citizens, such as mothers worried about the health of their children.

The thrust of the public comments was on whether the commission should set the proposal for a public hearing. Most of the witnesses agreed that even if the draft isn’t perfect, it should move forward so that the process can evolve.

When the commission conducts its public hearings in February, the comments will focus more on the rules themselves after stakeholders have had a chance to thoroughly review the recently released proposal.

Several elected officials testified in support of setting a hearing for the rules, including Democratic Reps. Su Ryden of Aurora, Mike Foote of Lafayette, and Max Tyler of Lakewood, among others.

The plan touted by the governor is said to make Colorado the first state to regulate detection and reduction of methane emissions. The proposal came after stakeholder meetings with the Environmental Defense Fund and three producers, including Noble Energy, Encana and Anadarko.

The proposed rules aim to capture 95 percent of emissions by:

• Requiring infrared cameras to detect leaks in production equipment;

• Mandating instrument-based monthly inspections on large sources of emissions;

• Expediting timelines for repairing leaks; and

• Requiring detection and repair for hydrocarbons, including both volatile organic compounds (VOCs) and methane.

Dr. Larry Wolk, the new executive director and chief medical officer for the Colorado Department of Public Health and Environment, said the oil and gas industry is responsible for as much as 30 percent of VOC and methane air pollution emissions in the state.

Health officials say that the proposed rules would reduce VOC emissions in Colorado by approximately 92,000 tons per year. Wolk said that’s more VOC emissions than are emitted by all cars in Colorado in a year, and it would represent a 34 percent reduction based on a 2011 study.

“These can create problems for people. Breathing problems, asthma problems, climate change,” said Wolk. “Many of these things like methane are greenhouse gases that have the potential to cause climate change and problems for people with asthma and other respiratory ailments.”
Health officials described the pollution from the oil and gas industry as “significant,” which has environmentalists wondering why for so many years the industry has been saying that there are limited health impacts caused by oil and gas development.

“It’s astounding,” said Sam Schabacker, regional director for Food and Water Watch, which played a key role in supporting the initiatives to ban or delay fracking in local communities.

“Those are probably pretty conservative statistics,” he continued. “You can’t have it both ways. You can’t say that this is a cleaner burning bridge fuel [natural gas] and say that in clear opposition to what the science shows, and then come out and say that this new rule is really going to help us clean up our very dirty act.”

The Colorado Statesman asked Hickenlooper and Wolk at the news conference on Monday whether citizens should be concerned that the oil and gas industry is responsible for the pollution.

“It was really done to give you some relevance to the amount,” explained Wolk.

Hickenlooper responded, “This isn’t just leaks from wells, this is every leak there is in the universe. Let’s get a frame of reference that while this is earth shattering and significant, it’s not that earth-shattering.”

Several oil and gas producers also spoke at the news conference, signaling their support for the rules and regulations.

“I really believe this proposal sends a clear message that we can have a healthy environment, a strong economy and responsible energy development here in Colorado,” said Ted Brown, senior vice president for the northern region at Noble Energy.

“Coloradans have a history of taking care of our neighbors and our families, and our industry is made up of moms and dads raising children in the very communities where we produce oil and natural gas, who know that the development of these abundant resources is only possible through the application of safe and proven technologies like fracking,” added Brad Holly, vice president of operations for the Rockies at Anadarko Petroleum Corporation.

“We believe that expansion of this rule… will result in genuine quantifiable environmental benefit. It’s a tough rule,” concluded Lem Smith, director of U.S. government and regulatory affairs at Encana Oil and Gas.

The Colorado Oil and Gas Association, which was not part of the news conference, said it is currently review-ing the proposal and has not yet made a decision on whether to support it.

“We participated in the larger stakeholder process… and are reviewing the proposed rule. We are committed to continuing the work we have accomplished with state regulators in regards to crafting new rules to ensure our air is kept clean,” said Doug Flanders, spokesman for COGA. “The families working in the oil and gas industry live and raise their families in Colorado and have a vested interest in ensuring we all have clean air.”

Flanders said this would not be the first time COGA worked on a bipartisan regulatory proposal, pointing to the 2010 Clean Air Clean Jobs Act, which aimed to reduce emissions from older coal-fired power plants, thereby placing more of a focus on natural gas.

“Since the natural gas boom, Colorado and the nation has seen a significant decrease in greenhouse gas emissions due to an increase in the electricity powered by natural gas,” said Flanders. “The conversions to natural gas-fired generation have allowed the United States to achieve the lowest CO2 emissions since 1992.”

Former Sen. Dan Grossman, regional director for the Environmental Defense Fund, represented the environmental side of the debate.

“What you see today here is a remarkable coalition of earnest individuals who came together and decided to try and make something work and address air pollution from the oil and gas sector in a meaningful and reasonable way,” explained Grossman.

Conservation Colorado is also “encouraged” by the proposed rules specifically that it includes methane.

“The proposed rule is a strong step forward to capture emissions from oil and gas facilities of harmful air pollutants that hurt all Coloradans,” said Pete Maysmith, executive director of Conservation Colorado.

“Oil and gas development is booming in Colorado and the state must move aggressively to protect our climate, public health and communities,” he added. “Given the devastating impact on Coloradans from climate change and increased ozone pollution, there is no margin for error.”

Not everyone is on board

But not everyone in the environmental and oil and gas worlds is currently on board with the proposals. Stan Dempsey, president of the Colorado Petroleum Association, pointed out that his organization was not included in the stakeholder meetings and did not see the rules until Monday.

“We’ve expressed our disappointment that it wasn’t a larger, broader stakeholder process,” said Dempsey, who added that his organization is currently speaking with members to decide how to proceed.

Dempsey believes that if the state is trying to satisfy federal ozone standards, then there may have to be a different rulemaking process than the one proposed by the governor.

“If we’re attempting to put in place rules, particularly for VOCs, that are intended to satisfy the EPA… that would be a different kind of rulemaking process, and I don’t think that’s the goal of this rulemaking,” opined Dempsey.

“That process of developing strategies that you would commit to at the federal government allow for more discussion and more information to be provided to all of the parties.”

He added that his members are concerned because this would represent the first statewide methane rules in the nation, thereby leaving many uncertainties. Beyond that, cost remains a fear. The state has placed a $30 million price tag on compliance, but the industry says it does not know how much the mandate would cost.

Dempsey believes there should at least be a cost-benefit analysis.

“If you spend X amount of money then are you getting the requisite benefit?” he asked. “You look at cost per ton, is it a reasonable proposition that if you spend a dollar that you’re going to get somewhere close to a dollar’s worth of benefit?”

There also appears to be a divide within the environmental side of the debate, largely voiced by those opposed to fracking.

Schabacker does not place much stock in the fact that the Environmental Defense Fund is on board. He called the organization an “apologist for the oil and gas industry.” He pointed to EDF’s role creating the Pennsylvania-based Center For Sustainable Shale Development, which works on shale gas development.

“If this is [Hickenlooper’s] idea of extending an olive branch, I’ve got to say, it’s very demonstrative of his true intentions, which is to get together with the industry and a group that masquerades as an environmental organization, but really just provides political cover for the industry, to announce another rule in the same sort of tired old tactic that he has used in order to blunt public criticism,” said Schabacker.

“There’s really very little distinction between the industry and EDF except for the word ‘environment’ in their name,” he added.

Schabacker called the proposal a “smoke screen” and likened it to other oil and gas rules proposed by the governor. He pointed to the governor’s 2011 initiative to require the industry to disclose chemicals used in the fracking process, but said the rule includes a loophole for trade secrets.

Schabacker also pointed to rulemaking by the Colorado Oil and Gas Conservation Commission, which required water quality testing both before and after a well is drilled, but offered an exemption for the heavily drilled Greater Wattenberg Area. Companies drilling in Wattenberg do not have to take new groundwater samples before drilling if the water has been tested within five years.

Schabacker took it one step further, saying Hickenlooper is trying to score political points following the fracking ban elections. A poll released this week by Quinnipiac University revealed that the governor is still struggling with approval as he heads into the 2014 election when he is facing re-election.

The poll stated that 49 percent compared to 42 percent say the governor does not deserve a second term. Hickenlooper’s overall approval and disapproval stood at 48 percent to 46 percent.

Schabacker said that what’s particularly troubling for the governor is that the fracking debate appears to cross political boundaries. While environmentalists are usually said to lean left, when it comes to opposition to fracking, the issue crosses political lines. So-called “fractivists” don’t necessarily identify as environmentalists because their concerns are more personal.

Broomfield offers an example. Senate District 23, which represents Broomfield, includes about 1,233 more registered Republicans than Democrats. There are also more unaffiliated voters in the district compared to those registered to either the Republican or Democratic parties.

The fracking moratorium in Broomfield only passed by 17 votes. A recount had been set for Dec. 2-4. Proponents doubt that the count will change since the same number of ballots will simply run through the counting machine again.

A handful of elections watchdog groups not associated with the fracking issue have questioned the legitimacy of the Broomfield election, which could complicate things and change the date of the recount.

The votes in the other communities were more definitive. Fort Collins voters backed the limits on fracking by nearly 65 percent; more than 76 percent of Boulder voters backed the moratorium; and 57 percent of voters in Lafayette decided to ban fracking. Longmont voters last year backed it by nearly 60 percent.

“Between the five communities that voted on fracking, there are over 400,000 Coloradans who live in those towns,” said Schabacker. “That’s a big political problem for the governor.

“What’s really fascinating is that Broomfield and Longmont are very similar communities in the sense that they both lean conservative… This speaks volumes about where Coloradans are on this topic… clearly there are Republicans and independent voters that are crossing over and voting for these bans…” added Schabacker. “This has wide bipartisan appeal and that spells a lot of trouble for the industry…”

Fractivists say they are not stopping with the five communities. They acknowledge that the votes are just the beginning and it could include asking Colorado voters to pass a statewide ban.

Fracking supporters fight back

Fracking supporters say the activists — including Frack Free Colorado — are simply trying to eliminate natural gas, and are guided by national organizations that don’t have the interests of Colorado in mind.

They point out that Russell Mendell, formerly of Brooklyn-based Water Defense, has acted as a spokesman for Frack Free Colorado. He could not immediately be reached for comment.

“These guys, they’re working with national groups,” said former Rep. B.J. Nikkel, who advised opponents of the fracking bans. “Frack Free Colorado, their organizer, Russell Mendell, worked for Water Defense, they state on their press releases that they’re involved with Water Defense, just like Food and Water Watch and other [nonprofits], and so they’ve been involved across the nation. This is more than just about Colorado. This is a national push by an extreme group of these [nonprofits] that want to ban natural gas.”

Nikkel said the activists used fear tactics, hype and misinformation to raise concerns.

“They haven’t been fair in portraying what their real agenda is, which is to ban natural gas from the state…” said Nikkel. “If voters really realized that their agenda is to ban natural gas, I don’t think they would go along with that. That’s part of this overall story, is using fear tactics and misinformation and hype to put fear into people so that they can get a win to tout nationally.”

Tisha Schuller, president and chief executive of COGA, pointed out that the vote in Broomfield was tight, suggesting that in a community that looks a lot like the rest of Colorado, voters are wary of fracking bans.

“In a very tight race, Broomfield voters demonstrated that they’re concerned about extreme energy bans,” said Schuller. “In Round 1, we significantly changed the dialogue about Colorado’s energy future. Round 2 starts today. We will continue until we put an end to the misinformation that ban supporters have been spreading for years.”

Peter@coloradostatesman.com